ITC Ltd, the largest cigarette maker in India, announced on Tuesday that it has recorded a net profit of 16 percent and over 25 percent rise in the first quarter sales, which ended on 30 June.
The company posted a net profit of 21.9 billion rupees ($364.36 million) for the quarter. The profit in the corresponding period last year was 18.9 billion rupees.
The total income for the quarter is 94.8 billion rupees, whereas the income of the corresponding period of the previous year was recorded as 76.1 billion rupees.
Income from cigarettes, which contributes over 45 percent to the total revenue of the company, reported profits of Rs 4201 crore against its revenue of Rs 3537 crore in the previous year. According to Reuters, ITC sells four out of five cigarettes in India, while the rest is owned by British American Tobacco plc.
Other FMCG products which include packed foods, apparel, stationery and personal care products grew by 10.9 percent year-on-year at Rs 1934 crore in the previous quarter.
Agriculture goods revenue surged at Rs 3296 crore, and the income from paperboards and packaging & paper was recorded at Rs 1288 crore against the previous year profits at Rs 1163 crore.
At 1.45 pm on Tuesday, stock price of ITC declined by 0.31 percent at Rs 356.
According to a press release, the company is currently focussed on FMCG, Hotels, Paperboards, Paper packaging and Agribusiness.
On Union Budget presentation 2014, finance minister Arun Jaitley proposed to increase the excise duty on cigarettes in the range of 11 percent to 72 percent. But experts believe that the tax structure and availability of cigarettes with different lengths will lead to the substitution of cigarette products.
The Hindu had reported about the tax structure on tobacco products in India. The taxation has been made complex and it provides leeway for companies to escape the burden of any tax hike.